FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1999
Commission File Number: 0-18393
WINLAND ELECTRONICS, INC.
(Exact name of small business issuer as specified in its charter)
Minnesota 41-0992135
(state or other juris- (I.R.S. Employer
diction of incorporation) Identification No.)
1950 Excel Drive, Mankato, Minnesota 56001
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code:
(507) 625-7231
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of May 1, 1999, the
Registrant had 2,891,786 shares of Common Stock, $.01 par value, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No x
1
<PAGE>
PART I-FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
WINLAND ELECTRONICS, INC.
BALANCE SHEET
(UNAUDITED)
ASSETS March 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 172,032 $ 20,656
Accounts Receivable, Net 3,156,510 2,482,507
Other Receivables 0 47,454
Inventories 3,726,685 3,763,939
Prepaid Expenses 46,339 62,882
Deferred Taxes 145,400 124,000
------------ ------------
Total Current Assets 7,246,966 6,501,438
------------ ------------
OTHER ASSETS:
Patent and Trademarks, net of amortization 5,137 5,505
------------ ------------
Property and Equipment, at cost:
Land and Land Improvements 270,009 270,009
Building 2,663,587 2,497,067
Machinery and Equipment 3,035,651 3,001,256
Data Processing Equipment 972,264 842,352
Office Furniture and Equipment 266,810 267,472
------------ ------------
Total 7,208,321 6,878,156
Less Accumulated Depreciation (1,926,003) (1,754,500)
------------ ------------
Property and Equipment, Net of Depreciation 5,282,318 5,123,656
------------ ------------
TOTAL ASSETS $ 12,534,421 $ 11,630,599
------------ ------------
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY March 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Notes Payable $ 1,857,227 $ 1,629,227
Current Maturities of Long Term Debt 569,827 573,183
Accounts Payable 1,524,368 1,263,326
Accrued Expenses:
Compensation 358,696 310,136
Other 91,359 47,757
Income Taxes Payable 245,307 228,843
------------ ------------
Total Current Liabilities 4,646,784 4,052,472
------------ ------------
LONG TERM LIABILITIES:
Deferred Revenue 207,353 209,084
Long Term Debt, Less Current Maturities 3,288,931 3,429,975
Deferred Taxes 111,000 111,000
------------ ------------
TOTAL LONG TERM LIABILITIES 3,607,284 3,750,059
------------ ------------
SHAREHOLDERS' EQUITY:
Common Stock 28,918 28,867
Additional Paid-In Capital 2,151,019 2,142,008
Retained Earnings 2,100,416 1,657,193
------------ ------------
Total Shareholders' Equity 4,280,353 3,828,068
------------ ------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $12,534,421 $11,630,599
------------ ------------
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1999 1998
----------- -----------
<S> <C> <C>
NET SALES: $ 6,615,048 $ 4,402,960
Cost of Goods Sold 5,092,939 3,509,481
----------- -----------
Gross Profit 1,522,109 893,479
OPERATING EXPENSES:
General and Administrative 470,111 302,958
Marketing 90,106 66,731
Research and Development 171,441 166,031
----------- -----------
Total Operating Expenses 731,658 535,720
OPERATING INCOME 790,451 357,759
----------- -----------
OTHER INCOME AND (EXPENSE) 29,159 39,763
INTEREST EXPENSE (116,082) (127,881)
----------- -----------
(86,923) (88,118)
----------- -----------
NET INCOME BEFORE INCOME TAXES 703,528 269,641
----------- -----------
PROVISION FOR INCOME TAXES 260,305 94,365
----------- -----------
NET INCOME $ 443,223 $ 175,276
BASIC EARNINGS PER SHARE $ 0.153 $ 0.062
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 2,888,453 2,833,039
DILUTED EARNINGS PER SHARE $ 0.150 $ 0.061
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, INCLUDING DILUTIVE SHARES 2,952,561 2,867,882
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1999 MARCH 31, 1998
-------------- --------------
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 443,223 $ 175,276
Adjustments to reconcile net income to net cash provided by
(used in) operating activeties:
Depreciation and Amortization 177,089 146,956
Loss on Disposal of Equipment -- 460
Deferred Taxes (21,400) --
Changes in Assets and Liabilities
(Increase) Decrease in:
Accounts Receivable (674,003) (379,750)
Other Receivables 47,454 --
Inventories 37,254 (712,983)
Prepaid Expenses 16,543 18,572
Increase in:
Accounts Payable 261,042 205,688
Accrued Expenses and Other 90,431 18,602
Income Taxes Payable 16,464 89,451
--------- ---------
Net Cash Provided By (Used In) in Operating Activities 394,097 (437,728)
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of Property and Equipment (335,382) (148,558)
Proceeds from sale of Equipment -- 200
--------- ---------
Net Cash Used in Investing Activities (335,382) (148,358)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Net Borrowings on Revolving Credit Agreement 228,000 824,000
Principal Payments on Long-term Borrowings, Including
Capital Lease Obligations (144,401) (128,511)
Proceeds From Issuance of Common Stock 9,062 1,500
--------- ---------
Net Provided by Financing Activities 92,661 696,989
--------- ---------
Net Increase in Cash 151,376 110,903
CASH
Beginning 20,656 23,542
--------- ---------
End $ 172,032 $ 134,445
--------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Payments For:
Interest $ 116,082 $ 128,143
Income Taxes 265,241 4,914
--------- ---------
Supplemental Schedule of Noncash Investing and Financing Activities
Capital Lease Obligations Incurred for the Purchase of Equipment $ -- $ 129,048
--------- ---------
</TABLE>
<PAGE>
WINLAND ELECTRONICS, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 1999
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by the
Company in accordance with generally accepted accounting principles, pursuant to
the rules and regulations of the Securities and Exchange Commission. In
management's opinion all adjustments necessary to a fair presentation of the
results for the interim period have been reflected in the interim financial
statements. The results of operations for any interim period are not necessarily
indicative of the results for a full year. Except for those described in note 2
below, all other adjustments are of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
have been condensed or omitted. Such disclosures are those that would
substantially duplicate information contained in the most recent audited
financial statements of the Company, such as significant accounting policies,
net operating loss carry-overs, lease and license commitments and stock options.
Management presumes that users of the interim statements have read or have
access to the audited financial statements included in the Company's most recent
annual report on Form 10-KSB.
NOTE 2 - ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company maintains an allowance for doubtful accounts based on the aging of
accounts receivable. The balance of the allowance for doubtful accounts is
$154,784 at March 31, 1999 and at December 31, 1998
NOTE 3 - INVENTORY
Major components of inventory at March 31, 1999 and December 31, 1998 are as
follows:
March 31, December 31,
1999 1998
---------- ----------
Raw Materials $2,380,911 $2,676,738
Work In Process 856,038 565,229
Finished Goods 489,736 521,972
---------- ----------
Total $3,726,685 $3,763,939
---------- ----------
NOTE 4 - FINANCING ARRANGEMENTS AND LONG -TERM DEBT
Financing Arrangement: The Company has a $3,500,000 revolving line-of -credit
agreement through June 1999 Interest on advances is at the bank's reference rate
(7.75 percent at March 31, 1999), and is due monthly. Advances are due on
demand, are secured by substantially all assets of the Company, and are subject
to a defined borrowing base equal to 80 percent of qualified accounts receivable
and 60 percent of inventories. In addition, the agreement contains certain
reporting and operating covenants. Advances outstanding on the revolving
line-of-credit agreement at March 31, 1999 and December 31, 1998, were
$1,857,227 and $1,629,227, respectively.
<TABLE>
<CAPTION>
Long-term Debt: The following is a summary of long-term debt: March 31, December 31,
1999 1998
---- ----
<S> <C> <C>
6.941% note payable due in monthly installments of $13,117,
including interest, to January 1, 2000, when the remaining
balance is payable, secured by property and equipment. $ 1,509,720 1,522,723
4% note payable due in monthly installments of $3,030,
including interest, to January 1, 2000, when the remaining
balance is payable, secured by property and equipment. 425,963 430,761
Note payable in monthly installments of $8,334, plus interest at
prime plus 0.75%, to October 2001, secured by accounts
receivable. 258,314 283,316
8.75% note payable due in monthly installments of $1,400,
including interest, to July 2003, secured by equipment. 167,124 167,660
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.95% to 9.5%, to
October 2000, secured by equipment. 104,384 130,584
</TABLE>
6
<PAGE>
WINLAND ELECTRONICS, INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 1999
(UNAUDITED)
NOTE 4 - FINANCING ARRANGEMENTS AND LONG -TERM DEBT(Continued)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---------- ---------
<S> <C> <C>
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.5% to 9.96%, to
August 2001, secured by equipment. 313,652 342,219
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.88% to 10.04%, to
October 2002, secured by equipment. 322,386 342,389
Capitalized lease obligations, due in various monthly
installments, with interest ranging from 8.5% to 9.3%, to April
2003, secured by equipment. 225,544 235,804
Capitalized lease obligations, due in monthly installments of
$9,399, with interest at 8.97%, to November 2004, secured by
equipment. 531,671 547,702
---------- ---------
3,858,758 4,003,158
Less current maturities 566,828 573,183
---------- ---------
Total Long-term Debt $ 3,291,930 $ 3,429,975
---------- ---------
</TABLE>
NOTE 5 - STOCK OPTIONS AND WARRANTS
As of March 31, 1999, options to purchase an aggregate of 209,000 shares of the
Company's common stock were granted and outstanding under the Company's 1989
Stock Option Plan(the "1989 Plan"). As of March 31, 1999, options to purchase
142,400 shares granted under the 1989 Plan were exercisable. The exercise prices
of all outstanding options under the 1989 Plan range from $1.75 to $2.69 per
share. Options to purchase 172,000 shares were granted and outstanding under the
1997 Stock Option Plan (the "1997 Plan") as of March 31, 1999, of which 128,000
shares were exercisable. The exercise prices of options under the 1997 Plan
range from $1.75 to $2.819 per share.
As of March 31, 1999, warrants to purchase an aggregate of 37,000 shares of the
Company's Common Stock at $2.20 per share were granted and outstanding, all of
which warrants are exercisable.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Three months ended March 31, 1999 v.
Three months ended March 31, 1998
Net Sales:
The Company recorded net sales of $6,615,048 for the three months ended March
31, 1999, an increase of 50.2% from $4,402,960 for the same period in 1998. The
increase in sales for the first quarter of 1999 compared to 1998 is primarily
attributed to increases in sales to several OEM customers, with sales to
Peoplenet Communications, Inc. representing the largest increase for the first
three months of 1999 over 1998 revenues. In addition, sales of the Company's
security/industrial products also increased for the first three months of 1999
over the same period in 1998.
The Company has in place several firm purchase commitments for delivery ii 1999,
the largest are as follows, Select Comfort Corporation $6 million dollars,
PeopleNet Communications, Inc. $2 million dollars and CIC Systems, Inc.
$300,000. In addition to the above mentioned agreements, the Company has several
smaller agreements with various OEM customers to be fulfilled in 1999.
The Company has continued to position itself as a full service designer and
manufacturer of custom controls and assemblies for OEM customers. The loss of
Select Comfort Corporation, PeopleNet Communications, inc. or other OEM
customers could have an adverse effect on the Company's short-term results. The
Company's marketing research indicates that there is a large potential market
for electronic design and manufacturing services and that this market is growing
rapidly.
Gross Profits:
Gross profit was $1,552,109 or 23.0% of net sales for the three months ended
March 31, 1999, compared to $893,479 or 20.3% of net sales for the same period
in 1998. Improved gross profits as a percentage of net sales for the first three
months of 1999 compared to 1998 were the result of a combination of product sale
price increases, product sales mix, and production efficiencies experienced
during the period.
Operating Expenses:
General and administrative expense was $470,111 or 7.1% of net sales for the
three months ended March 31, 1999, compared to $302,958 or 6.9% of net sales for
the same period in 1998. As a percentage of sales general and administrative
expense increased for the first quarter of 1999. The actual general and
administrative expenses increased $167,153 for both the first three months of
1999, compared to 1998. The increase in general and administrative expense is
primarily due to increases in accrued performance bonus expense. Performance
bonuses are tied directly to the Companies profits for the period, which
increased in excess of 150 percent for 1999 compared to 1998.
Marketing and customer relations expense was $90,106 or 1.4% of net sales for
the three months ended March 31, 1999, compared to $66,731or 1.5% of net sales
for the same period in 1998. Although marketing and customer relations' expense
declined slightly as a percentage of sales, the actual marketing and customer
relations' expense increased $23,375 during the first quarter of 1999 compared
to the same period of 1998. The increases are due to the addition of marketing
and customer relation's personnel necessary to provide appropriate levels of
service to OEM customers and assist in securing new, long-term OEM
relationships.
Research and development expense was $171,441 or 2.6% of net sales for the first
quarter of 1999, compared to $166,031 or 3.8% of net sales for the same period
in 1998. Research and development expense declined as a percentage of sales for
the first three months of 1999, compared to 1998. The actual expense increased
$5,410 for the period. Research and development staff continue to concentrate
efforts on design and support services for the Company's OEM customers, as well
as researching possible new proprietary product designs.
<PAGE>
Interest Expense:
Interest expense, including interest on the revolving line of credit, other
long-term borrowing, and interest on capital leases was $116,082 or 1.8% of net
sales for the three months ended March 31, 1999, compared to $127,881 or 2.9% of
net sales for the same period in 1998. The decline in interest expense both in
actual dollars and as a percentage of sales is primarily attributed to a
reduction of the interest rate and lower outstanding balances on the revolving
line of credit. The interest rate on the revolving credit agreement was reduced
from 1/2 of a percent over the prime rate for the first quarter of 1998 to the
prime rate for the first quarter of 1999.
Net Earnings:
The Company reported net income of $443,223 or $0.150 per diluted share for the
three months ended March 31, 1999, compared to net income of $175,276 or $0.061
per diluted share for the same period in 1998. Net income rose 152.9% for the
first quarter of 1999 compared to the same period in 1998. The dramatic increase
in net income is attributed to the increase in sales combined with improved
gross profit margins, maintaining control over operating expenses and a
reduction of interest costs during the period.
The Company believes inflation has not significantly affected its results of
operations.
Liquidity and Capital Resources
The current ratio on March 31, 1999 was 1.56 to 1, compared to 1.60 to 1 on
December 31, 1998. Working capital on March 31, 1999 was $2,600,182 compared to
$2,448,966 on December 31, 1998. The increase in working capital is primarily
attributed to increases in accounts receivable and cash that are offset by
additional short-term borrowing needed to support the increased sales levels for
the first three months of 1999.
The Company has a revolving credit agreement with the Norwest Bank Minnesota
South N.A.("Norwest"), with a maximum loan limit of $3,500,000, subject to
additional limitations set forth in the credit agreement. The interest rate per
annum on the revolving credit agreement is equal to the reference rate. At March
31, 1999, advances outstanding on the revolving line of credit was $1,857,227.
The Company's management believes that capital available through the current
credit agreement, together with cash flows from operations will be sufficient to
meet the Company's capital needs in the near future.
In late 1998, the Company made a decision to expand its facility by 5,000 square
feet and begun construction of the additional space in February of 1999. The
expansion, including additional equipment and furniture is estimated to cost
between $600,000 and $700,000 to complete. The Company plans to finance the
expansion primarily through a mortgage loan from Norwest Bank, with a portion of
the financing to come from the Minnesota Investments Fund through a loan with
the City of Mankato. The equipment and additional furniture will be financed
through capital equipment leases. The expansion is scheduled to be complete in
late May 1999.
Year 2000:
Year 2000 Background
The Company's overall goal is to be Year 2000 compliant. To accomplish this
goal, the Company is addressing the issue with respect to both its information
technology (IT) and non-IT systems, as well as its business relationships with
key third parties. To be ready, the Company needs to evaluate the Year 2000
issues and fix any problems it can so that all of its systems and relationships
will be suitable for continued use into and beyond the Year 2000.
The Company began addressing the Year 2000 issue in 1996 using a multi-step
approach, including inventory and assessment, remediation and testing, and
contingency planning. The Company began by assessing its internal computer
systems, including their components and machinery, that were susceptible to
system failure or processing errors as a result of the Year 2000 issue. This
phase is substantially complete.
<PAGE>
The Company's Year 2000 efforts have also included assessment of "embedded"
systems (such as automated systems and telephone systems). In 1998, the Company
hired an outside consultant to assist in the assessment and remediation phases
of handling the Year 2000 issue.
As part of the assessment phase, the Company has substantially completed the
initial communications with certain key third parties, including suppliers,
distributors, and customers in order to determine the extent to which the
Company is vulnerable to those third parties' failure to remediate their own
Year 2000 issues. The Company believes this part of the assessment phase will
continue throughout 1999 and cannot predict the outcome of other companies'
remediation efforts.
Year 2000 Costs
The Company plans to continue to work on its Year 2000 compliance efforts
throughout 1999. To date, the Company has spent only a minimal amount during the
assessment phase. Because the Company is still conducting the assessment phase
of its Year 2000 analysis, it cannot yet predict the total remaining cost of its
assessment, remediation and testing phases. As the Company continues its
analysis, it will monitor such costs. The cost will depend on the availability
of certain resources, third parties' Year 2000 readiness and other unpredictable
factors.
Risk Assessment
At this time, the Company believes that its most reasonably likely worst case
scenario is that the Company and/or its key customers could experience minor
disruptions. In the event that such disruptions do occur, the Company does not
expect that they would have a material adverse effect on the Company's financial
condition and results of operations. Due to the complex issues surrounding Year
2000 and other significant business issues, however, it is difficult to predict
outcomes and resulting consequences that could have a material adverse impact on
the company's results of operations, financial condition and cash flows.
Contingency Plans
During 1999, the Company plans to prepare contingency plans if it determines
that certain Year 2000 issues cannot be resolved by December 1999. Such plans
will be designed so that the Company's critical business processes can be
expected to continue to function on January 1, 2000 and beyond. The Company's
contingency plans will be structured to address both remediation of systems and
their components and overall business operating risks. These plans are intended
to mitigate both internal risks as well as potential risks in the supply chain
of the Company's suppliers and customers.
Cautionary Statements:
As provided for under the Private Securities Litigation Reform Act of 1995, the
Company wishes to caution investors that the following important factors, among
others, in some cases have affected and in the future could affect the Company's
actual results of operations and cause such results to differ materially from
those anticipated in forward-looking statements made in this document and
elsewhere by or on behalf of the Company.
The Company derives a significant portion of its revenues from a limited number
of major OEM customers which are not subject to any long-term contracts with the
Company. If any major customer should for any reason stop doing business with
the Company, the Company's business would be significantly adversely affected.
Some of the Company's key customers are not large well-established companies,
and the business of each customer is subject to various risks such as market
acceptance of new products and continuing availability of financing. To the
extent that the Company's customers encounter difficulties, or the Company is
unable to meet the demands of its OEM customers, the Company could be adversely
affected.
<PAGE>
The Company's ability to sustain continued increases in revenues and profits is
dependent upon its ability to retain existing customers and obtain new
customers.
The Company competes for new customers with numerous independent contract design
and manufacturing firms in the United States and abroad, many of whom have
greater financial resources and a more established reputation. The Company's
ability to compete successfully in this industry depends, in part, upon the
price at which the Company is willing to manufacture a proposed product and the
quality of the Company's design and manufacturing services. There is no
assurance that the Company will be able to continue to win contracts from
existing and new customers on financially advantageous terms, and the failure to
do so could prevent the Company from achieving the growth it anticipates.
The operations and success of the Company depend, in part, upon the experience
and knowledge of W. Kirk Hankins, the Company's Chief Executive Officer and
Chief Financial Officer, and Lorin E. Krueger, the Company's President and Chief
Operating Officer. The loss of either Mr. Hankins or Mr. Krueger would have a
material adverse effect on the Company.
The impact of Year 2000 issues on the Company's business depends on the
accuracy, reliability and effectiveness of the Company's and its suppliers' and
customers' assessment and remediation of Year 2000 issues. There can be no
assurance that the Company's efforts will result in complete resolution of Year
2000 issues in order to prevent a material effect on its critical business
systems.
<PAGE>
PART II-OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company is one of five defendants in a products liability case venued in the
Colorado State District Court for the County of Boulder. The case was commenced
by two product consumers, Lee Turner and Elizabeth Turner, in February of 1999.
The Turners allege that the basement of their home was flooded by a
malfunctioning water system and have sued a variety of manufacturers, designers
and installers claiming that the water damage resulted from some alleged but
unspecified failures in the water system design, construction, alarm system or
component parts. The plaintiffs contend that flooding occurred in the lower
level of their home while they were absent, thereby allegedly damaging floors,
carpeting, walls and personal property. The amount of monetary damages sought
has not been identified by the plaintiffs at this time.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibit to this report is:
27.1 Financial Data Schedule (included in electronic
version only)
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1999
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WINLAND ELECTRONICS, INC.
Dated: May 7, 1999 By: /s/ W. K. Hankins
William K. Hankins,
Chief Executive Officer and
Chief Financial Officer
(Principal Executive Officer
and Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 172,032
<SECURITIES> 0
<RECEIVABLES> 3,311,294
<ALLOWANCES> 154,784
<INVENTORY> 3,726,685
<CURRENT-ASSETS> 7,246,966
<PP&E> 7,208,321
<DEPRECIATION> 1,926,003
<TOTAL-ASSETS> 12,534,421
<CURRENT-LIABILITIES> 4,646,784
<BONDS> 1,935,683
28,918
0
<COMMON> 0
<OTHER-SE> 4,251,435
<TOTAL-LIABILITY-AND-EQUITY> 12,534,421
<SALES> 6,615,048
<TOTAL-REVENUES> 6,644,207
<CGS> 5,092,939
<TOTAL-COSTS> 5,824,597
<OTHER-EXPENSES> 116,082
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 116,082
<INCOME-PRETAX> 703,528
<INCOME-TAX> 260,305
<INCOME-CONTINUING> 443,223
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 443,223
<EPS-PRIMARY> 0.153
<EPS-DILUTED> 0.150
</TABLE>
